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Officials expect big local impact from budget repair legislation

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FRANK J. SCHULTZ
February 16, 2011
— Gov. Scott Walker's budget repair bill would cut the wages of thousands of local workers.

The workers teach the children, plow the roads, pick up the garbage and provide many other services in Rock and Walworth counties.


Local workers would be required to pay at least half of the contributions to their pension plans and probably will be forced to contribute more to their health plans.


How much more? That's up to local officials.


Walworth County Administrator David Bretl said he's concerned about workers' reactions to the loss of bargaining rights. He is not alone.


"There's an emotional impact as to what the economic impact for employees will be in weeks to come, how it will impact their families," said Milton City Administrator Jerry Schuetz.


"The impact on morale, when staff are giving even more of themselves on a daily basis to meet the escalating needs of our students, will be profound," Evansville Superintendent Heidi Carvin said.


One big unknown is health insurance.


Governor's spokesman Cullen Werwie said it's not true, as some have reported, that local employees would have to pay 12.6 percent of their health-care premiums. That's the figure for state employees, but local councils and boards would set the employee health insurance contributions, Werwie said.


Local governments could set the health-insurance premium at any percentage they choose, Werwie said.


That uncertainty aside, the biggest state teachers union estimates that teachers could see an average loss of $400 to $600 a month from their paychecks, said Christina Brey, spokeswoman for WEAC.


Workers could get some of that back if they opted out of paying union dues, as the bill would allow. Full-time Janesville teachers pay dues of $719 a year, which averages about $60 a month.


The loss of funding would mean the union would not be able to provide its current member services, Brey said.


Those services include experts on professional development, lawyers that help in bargaining and grievance proceedings, access to lobbyists, and supporting political candidates.


Grievance proceedings could become a thing of the past, however, as the bill would reduce a union contract to one item: wages.


After current contracts expire, all provisions of past contracts would go out the window. A union could not negotiate for benefits, grievance procedures or working conditions. Only wages.


Wages could rise only as fast as the Consumer Price Index, unless voters approved higher wages in a referendum.


Brey said the CPI provision is unclear: What happens if the CPI goes negative—would workers see their wages cut?


Local and state sources expressed uncertainty Monday and Tuesday about the precise meaning of all the bills' provisions.


Delavan City Administrator Joe Salitros said that other than the health insurance and pension changes, he wasn't sure how the legislation would affect the city.


Edgerton City Administrator Ramona Flanigan declined comment, saying that there's too much conflicting information.


With that uncertainty in mind, and knowing that the Legislature could alter Walker's plan, here are answers to some of the questions that have been raised in recent days:


Q: How soon would the bill take effect?


A: As soon as Walker signs it, although local contracts may have provisions such as the ones for state employees, which require a 30-day notice before becoming void, Werwie said.


Q: Would the bill affect existing contracts?


A: No, Werwie said. Local governments must honor existing contracts.


For example, the bill could not override the Janesville teachers' contract, which lasts through June 2013.


Q: What happens if a union contract is being negotiated now but isn't finalized until after the law changes?


A: It appears unions could bargain only about wages and only up to the increase in the CPI.


Evansville School District Business Manager Deb Olsen said she doesn't have enough information to say how this would affect the district's current contract negotiations.


Milton schools Superintendent Bernie Nikolay said his district is holding off on contract talks with the 237 employees in its teachers union.


"We will not bargain until this all shakes itself out, until we will know whether the governor's proposal is in place or whether it will be something different," Nikolay said.


Q: Would public employees be able to strike?


A: The current ban on public-employee strikes would remain, Werwie said.


But if the state tells employees that they have no right to bargain for working conditions, what avenue is left for them to be heard? Brey asked.


That isn't a threat, Brey said. "I just think that's what members are asking—what voice do we have, thenn"


Q: Would the bill affect money already paid into the Wisconsin Retirement System?


A: No, Werwie said. The bill is not retroactive.


Q: How would this affect local budgets?


A: The budget repair bill would help local governments balance their budgets, but Walker is expected to announce cuts in aid to local governments when he announces his biennial budget plan Tuesday.


Carvin and her counterpart in Janesville, Karen Schulte, said the budget gains districts would see from workers paying more for their benefits would be canceled out by cuts in state aid.


Schulte said that if the result is budget-neutral, then Janesville still would have to deal with its projected $9.7 million budget shortfall for 2011-2012.


Some workers might speed up plans for retiring if the bill becomes law, Olsen said, and that would help the Evansville district on staffing decisions, but if not, the district might face layoffs.


John Forester, a lobbyist for the Wisconsin Association of School Boards who was briefed on the bill last week, said he expects the state to cut aid by about $500 per student.


Forester suggested in a video briefing sent to association members Monday that districts would be able to make up for the aid cut through the cuts in employee benefits.


Q: Could a local board go even further, cutting back on health benefits?


A: "I am seeing nothing requiring a board of education to honor any agreement," Brey said. "It is simply whatever they want."


Q: What will all this mean for unions?


A: Rock County Human Resources Director David J. O'Connell said the loss of bargaining rights would force the county to figure out how those formerly protected employees would fit into the policy and procedures established for non-represented workers.


Brey said the bill would permit a teacher to be fired for any reason with no recourse to a grievance procedure. A public-employee union would have to hold a recertification vote once a year. Union members would not have to pay dues.


"You're basically throwing decades of worker and employer relationships out the window," Brey said.


That, combined with a loss of earnings, does not bode well for the quality of people entering the teaching profession, she argued.


"How are we going to get those people and keep highly qualified people?" Brey asked. "Everybody says we need the best and brightest, and yet the educators in the schools have no voice."


Q: What's going to happen in our schools?


A: Tony Evers, the elected superintendent of public instruction, on Monday sent a letter to legislative leaders. Evers wrote, in part:


"This bill will shatter relationships among educators and school leaders, undermining current innovations around teacher compensation, evaluation and improvement. It will have a chilling effect on teacher recruitment and sends a terrible message about the value of public service. … These efforts will hurt our classrooms, our kids and the people who educate them."


Walker on Monday rejected the notion that children might be harmed. That could only happen if children were the ones paying for health insurance or pensions, he said.


Q: Won't cuts to these workers' incomes translate into fewer dollars being spent on local businesses?


A: John Beckord of the business group Forward Janesville said local businesses are likely to feel at least some effect when hundreds of local workers start earning less.


But the state has to fix its budget deficit some way, Beckord said, and if it's not these cuts, it would be increases in sales, property or income taxes, and that also would mean fewer dollars spent locally.


Evers said the Walker plan is too much, too fast.


"Hastily enacting such significant salary cuts will take money out of the local economy and could jeopardize our fragile recovery, especially in rural areas. In order to minimize the economic harm, the Legislature could enact some benefit changes immediately, while phasing in others during the next biennial budget," Evers wrote in his letter.


Q: Why are police and firefighter unions exempted by the plan?


A: Some have suggested political payback for support in Walker's election, but Forester said the governor told him and others on Thursday that Walker "wants protective services supportive if there is significant labor unrest."


Elkhorn City Administrator Sam Tapson said he is concerned that excluding police and firefighters would create a two-tier system for public employees.



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